Everything will be fine, one might say in view of the hopeful news about Covid19 vaccines that will soon be available. And at least the financial markets agree with this credo. But is this just a snapshot or already a signal for a synchronised global upswing?

The announcement that several vaccines against the virus could be approved before the end of this year has not only caused the prices of the respective pharmaceutical companies to soar, but also boosted the stock markets in general. Although many details – such as the distribution of the vaccines – have not yet been clarified, the upswing on the markets is virtually anticipated. This applies both to the development of the real economy and to the opportunities on the capital markets. Investors worldwide are optimistic. The question, however, is: What factors can influence this development? And at what starting point do we actually stand?

Corona is still omnipresent

The macroeconomic backdrop is certainly more constructive at present than it was in the summer or even in the spring. Although the second wave of infection has been rolling for weeks, it has not hit the economy that hard so far. This is partly because governments in Europe have so far tried to avoid a complete lock-down. The international movement of goods, for example, is largely unhindered – that was not the case during the first wave. On the other hand, people have learned from the experience of the crisis in the spring, which creates a better basis in many respects. That is the good news.

Uncertainty factor USA

But the Covid19 infection figures in most countries are still rising or at least stagnating at a high level. The US is fighting a third wave, and if there were to be new lockdowns, this would certainly result in weaker economic activity. In addition, an agreement in Congress on the support programme so urgently needed by the economy is not yet in sight – this also plays a major role in the development of the financial markets worldwide.

Power forecast with small blemishes

This rather ambivalent situation makes an exact prognosis difficult, but nevertheless: the announcement of the vaccines and the hope for an early return to normality is a euphoric signal. Even renewed economic setbacks caused by Corona – according to the calculations of many financial experts – could be quickly offset once widespread vaccination begins. They expect GDP in the Eurozone to return to pre-Corona levels by the end of 2022. The capacity for a rapid economic recovery has already been demonstrated this summer, they say.

Investors are keeping an eye on this development. It is wise to start thinking about the post-pandemic period now. 

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